Final answer:
The demand for the good must have been inelastic, meaning that the quantity demanded doesn't change much in response to a change in price.
Step-by-step explanation:
The demand for the good must have been inelastic. Inelastic demand means that the quantity demanded doesn't change much in response to a change in price. When the merchant raises the price and total revenues still increase, it suggests that the consumers are willing to pay the higher price because they consider the good to be a necessity or because there are no close substitutes available.
For example, if the good is a unique product that consumers highly value, they may continue to buy it even at a higher price. Similarly, if there are no other similar goods available in the market, consumers may have no choice but to purchase the good at the higher price.
Overall, this situation indicates that the demand for the good is relatively insensitive to price changes, resulting in an increase in total revenues despite the price increase.